USA: Valero Says Fire at Texas Refinery Has `Substantially' Weakened

by Victor Epstein (Bloomberg)
Valero Energy Corp., the largest U.S. refiner, said a fire that started at its McKee plant in Sunray, Texas, yesterday has ``substantially'' subsided.

At least 19 people have been injured and seven remain hospitalized, Mary Rose Brown, a spokeswoman for the San Antonio-based company, said in an e-mail. Three of the victims are in critical condition in the University Medical Center burn unit in Lubbock, Texas, according to a nursing supervisor. The blaze began at 2 p.m. Houston time yesterday after an explosion in a unit that processes residual oil, a low-grade byproduct of petroleum distillation.

``The fire at the Valero McKee Refinery in Sunray, Texas, has subsided substantially, but it is not extinguished,'' Brown said. ``All plant personnel have been accounted for and evacuated and the plant is shut down.''

The McKee refinery has a daily processing capacity of 170,000 barrels of oil and is located about 420 miles northwest of Dallas. The fire was at least the sixth malfunction at Valero's seven Texas plants this month. A Jan. 28 blaze temporarily halved production at its complex in Texas City, Texas. Valero also had a fire at its plant in Delaware City, Delaware, on Feb. 13.

``They had been a very good refinery operator, and they have experienced several mishaps in the last three weeks,'' said Andy Lipow, president of Lipow Oil Associates LLC, a Houston- based consulting company.

40th-Largest Refinery
The McKee plant provides processed fuel products to El Paso, Albuquerque, Abernathy, Lubbock, Colorado Springs and Denver, the company said. It is the 40th largest refinery in the U.S. according to the federal Energy Information Administration.

``Regarding our commercial operations, we have purchased product and made other arrangements to cover our immediate supply requirements,'' Brown said.

More than 400 people were evacuated from the 800-acre complex after the initial explosion and fire. A triage unit was set up at a local community center to handle the wounded. Additional Valero personnel have arrived at the McKee plant from Valero's San Antonio headquarters and its refineries in Corpus Christi and Three Rivers, Texas, Brown said at 11:24 p.m. Staff from the company's refinery in Ardmore, Oklahoma, are expected to arrive by 1 a.m.

The McKee plant was the site of one of the deadliest fires in U.S. refinery history in 1956, when 19 firefighters died in a blaze known as the ``Sunray disaster,'' according to Industrial Fire World Magazine's Web site.

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